Solving delivery problems in a gridlocked city

http://www.bbc.co.uk/news/business-36191046

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Meshack Alloys knows the challenges of delivering goods in Kenya only too well.

"In the past we worked with a couple of bus and courier companies in East Africa, and we saw that most of them had issues with last-mile logistics," remembers Meshack Alloys, chief executive of Sendy, a Kenya-based logistics website and mobile phone app.

"I actually grew up in a village here in Kenya… I have seen the road network being a problem - as I grew up, I saw how products would basically reach the end person at a cost that was high," says 29-year-old Mr Alloys in his office in Kenya's capital Nairobi, notorious for its severe traffic jams.

In response, Mr Alloys and two friends, who had worked together for a bus company, developed a 24/7 on-demand platform that connects individuals or companies looking to dispatch packages, with motorbike riders offering delivery services.

"There are traditional courier companies that might do overnight or same-day delivery, but they don't do immediate, and they might not go residential," explains Malaika Judd, the 30-year-old US chief operating officer of Sendy, who left a Nairobi-based investment fund to join the start-up.

Sendy initially worked with motorbike riders - known popularly in Kenya as boda bodas - but has expanded to include pick-up trucks, large vans and cyclists.

"These are all crowd-sourced riders," adds Ms Judd. "We don't physically own any of the vehicles or the bicycles, and all the riders, cyclists and drivers work for themselves on the platform."

The platform operates in a way that would be familiar to any user of Uber - a user enters the required delivery route, and is given a price quote. Once the pick-up is requested, users can track the rider, and then follow a package to its point of delivery.

Payment is made through a pre-registered credit card, or using the popular M-Pesa mobile money transfer platform.

Problem solving

Sendy started by using very simple technology that worked with basic phones, using SMS and USSD technology and GPS trackers on bikes. But as the price of smartphones has come down, the company is rolling out a hybrid app that also works on riders' smartphones.

"We wanted to solve this problem using existing assets and people… we didn't want them to buy fancy gadgets, expensive gadgets to do that," says Mr Alloys.

"We looked at how do we make these people utilise their assets to the maximum and bring down the cost."

Since it launched its first product in April 2014, Sendy has completed more than 20,000 deliveries - averaging between 150 and 200 per day - and has around 60 active riders on the platform, all of whom are vetted.

For Sendy rider Geoffrey Oloo, reliability of work is a key attraction of the platform. Riders take away 80% of each delivery fee, which starts at a base amount of KES240 ($2.40; £1.60) for the first 7km.

"You are sure in a day that you will get work because there are so many customers in the Sendy system," he says. "When I am with Sendy I am sure at the end of the day that I will having something in my pocket, something I can take home."

Some 75% of daily deliveries are done for corporate business accounts and the rest for individuals.

Sendy works with businesses including e-commerce firms dispatching purchased goods around the bustling Kenyan capital, food companies offering home delivery, and pharmacies moving medicine to patients.

The company is hoping to launch an investment round within the next six months, having successfully attracted funding from corporate and tech investment funds, as well as local angels, in an earlier investment last year.

The team is eager to expand to new cities - both within Kenya and beyond - using hoped-for funding in the next investment round.

Having watched Sendy's emergence, tech blogger Moses Kemibaro sees scalability as the company's next hurdle.

"I think their big challenge is really scaling it to get as many people as possible onto the service before some big international player checks into the market, which potentially could compromise the opportunity to grow," says Mr Kemibaro.

"Already in Kenya, we have seen other on-demand service providers like EasyTaxi and Uber doing well," he adds.

"Increasingly, you will see such providers moving into markets like Mombasa and Nakuru. I think Sendy do have the same potential, but the question at the end of the day is really whether they have the resources to expand."

The Sendy team also hope that the service will help to offer solutions to some basic infrastructural problems that are common in the East African region.

"Traffic is a huge issue, infrastructure of roads is an issue, quality of data on a map is an issue, addressing is an issue, actually having a house number is an issue, street names is an issue," explains Ms Judd.

"While we are providing these on demand services, we are also improving a lot of the base infrastructure… for example we can collect data on all these addresses, we can save these addresses and I can understand now residential locations.

"We can capitalise on the fact that we can beat the traffic by using individuals on two wheels, cyclists or riders. So all of these challenges are also really cool opportunities for Sendy to beat the alternative solutions out there."